Split-Off

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Split-Off

The process whereby a parent corporation organizes a subsidiary corporation to which it transfers part of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the shareholders of the parent corporation in exchange for a portion of their parent stock.

A split-off differs from a spin-off in that the shareholders in a split-off must relinquish their shares of stock in the parent corporation in order to receive shares of the subsidiary corporation whereas the shareholders in a spin-off need not do so.

References in periodicals archive ?
Type D divisive reorganizations can take the form of a split-up, a split-off, or a spinoff, whereby a corporation transfers part of its assets to one or more controlled corporations, which then distribute their stock in one of the following ways:
* In a split-off, certain assets of a corporation are transferred to a newly created corporation in exchange for all of the new corporation's stock.
368(a)(1)(D), involve transfers to controlled corporations that may be either divisive (spin-offs, split-offs or split-ups) or nondivisive.
368(a)(1)(D) split-ups or split-offs (as opposed to spin-offs), it may be possible to step up the basis of a controlled corporation's assets with only one level of tax.